The trend remains uncertain on the EUR/USD on the morning of a highly anticipated Fed meeting, which could have a decisive impact on Forex.
Remember that the Euro Dollar fell in the first part of the day on Tuesday, against European inflation below expectations, which suggests that the ECB's rate hike scheduled for Thursday could be limited to 0.25%.
However, after descending to a hollow at 1.0940, the EUR/USD pair then bounced back above the key threshold. from 1.10 to settle around 1.1020 on Wednesday morning.
As for Wednesday's schedule, EUR/USD traders' attention will be primarily focused on tonight's Fed meeting, where a 0.25% rate hike is widely expected. the Investing.com Fed Barometer indicating a probability of more than 85% for this outcome.
It is therefore probably not the Fed’s decision that will influence the EUR/USD the most, but rather the indices than the bank central will provide regarding its next decisions. For now, the market very broadly expects a break in rate hikes for the next meeting.
If the FOMC meeting on Wednesday evening allows us to confirm this outlook, we should expect to see the price increase. see the dollar weaken, with a mechanically bullish impact on the EUR/USD price. If, on the contrary, the Fed is firm and leaves the door open to another rate hike in June, the Euro Dollar should suffer.
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EUR/USD technical update
From a graphical point of view, the EUR/USD underlying trend visible in daily data remains bullish.
The area of 1.09-1.0920 is immediate support ;diat, below which the 1.0770-1.0820 area could be targeted. À note that this area is of particular importance, as it currently hosts the 50- and 100-day MAs as well as the bullish trendline visible since late September 2022.
À upwards, the annual high marked last week at 1.1095 and the psychological level of 1.11 form the first significant resistance area for EUR/USD.
EUR/USD faces potentially decisive Fed meeting